The NSE Nifty settled the day 93.20 points or 0.88 per cent lower at 10,452.30 after shuttling between 10,612.90 and 10,434.05.
Giving up early gains, benchmark Sensex tumbled 287 points to end at 34,010 on friday on widespread selling in auto, metal, PSU, capital goods, realty and banking counters.
Punjab National Bank, at the centre of a massive Rs 11,400-crore fraud, fell for the third straight session.
The state-run lender has lost over Rs 8,700 crore in its market capitalisation in three days.
The BSE 30-share barometer, after a robust start, advanced to a high of 34,508.24 in morning trade.
However, it succumbed to across-the-board profit-booking in the later part of the session to touch a low of 33,957.33, before settling 286.71 points, or 0.84 per cent lower at 34,010.76.
The NSE Nifty settled the day 93.20 points or 0.88 per cent lower at 10,452.30 after shuttling between 10,612.90 and 10,434.05.
Both the indices ended flat for the week.
The Sensex rose marginally by 5 points, or 0.01 per cent, while the Nifty slipped by 2.65 points, or 0.02 per cent.
Foreign portfolio investors (FPIs) sold shares worth Rs 240.29 crore, while domestic institutional investors bought shares worth Rs 49.92 crore yesterday, as per provisional data.
"Market slid despite a positive trend in global market.
“The alleged fraud in PNB dented investors' optimism on banks and they expect that the scam may extend to some other banks.
"Further, India’s trade deficit which widened in the month of January and rising bond yields are likely to add volatility in the near term," said Vinod Nair, Head of Research, Geojit Financial Services.
Sentiment turned weak after the country's trade gap soared to $16.3 billion in January on account of a 26.1 per cent increase in imports to $40.68 billion due to increased inbound shipments of crude oil, as per data released by the commerce ministry.
India's exports grew by 9 per cent to $24.38 billion in January, helped by a healthy growth in shipments of chemicals, engineering goods and petroleum products.
The Nifty PSU bank index fell 2.49 per cent, with Bank of India shedding 1.84 per cent and Bank of Baroda losing 3.55 per cent.
Shares of Union Bank of India declined more than 1.25 per cent after the lender said it has an exposure of Rs 1,900 crore to the PNB fraud case.
Gitanjali Gems, named in the fraud case, slumped 20 per cent.
PNB lost 2.10 per cent.
SBI was the biggest loser among Sensex components, falling by 2.55 per cent, followed Yes Bank at 2.52 per cent.
Other laggards were ICICI Bank, Maruti Suzuki, Bharti Airtel, Adani Ports, Tata Steel, L&T, IndusInd Bank, Tata Motors, Coal India, Power Grid, RIL, Axis Bank, Hero MotoCorp, Bajaj Auto, M&M, ONGC and ITC, losing up to 2.31 per cent.
In contrast, Infosys and TCS remained in better shape and rose by up to 0.96 per cent.
Sectorally, the BSE auto index emerged as the worst performer by falling 1.65 per cent, followed by metal (1.58 per cent), PSU (1.57 per cent), realty (1.44 per cent), capital goods (1.33 per cent), oil and gas (1.19 per cent) and banking (1.17 per cent).
IT index closed marginally higher.
In the broader markets, the small-cap index fell 1.22 per cent, while mid-caps shed 1.20 per cent.
Globally, crude oil prices edged higher as the dollar stood near a three-year low in subdued Asian trade, with many markets closed for the Lunar New Year holiday.
In the Asian region, Japan's Nikkei rose 1.19 per cent, while Hong Kong's Hang Seng as well as Shanghai Composite were closed for public holidays.
European markets traded higher in their early deals. Frankfurt's DAX gained 0.97 per cent, while Paris CAC 40 rose 0.86 per cent.
London's FTSE was up 0.76 per cent.
Photograph: Danish Siddiqui/Reuters
